An article by By Mark Hulbert of MarketWatch titled Can it be a bubble if many recognize it as such?  wrote a great article titled “Are bubbles only seen in retrospect?” based on research by
Professor Robert Schiller , the author of Irrational Exuberance which predicted the NASDAQ market correction and his recent book Irrational Exuberance: Second Edition which discusses the housing boom.
Professor Robert Schiller , who I admire greatly for his insight on the housing market and for whom I got to meet in the green room at the taping of CNBC Town Hall: The Real Estate Boom [Note: WM Clip]  basically says that we are not protected from a housing bubble simply because people are worried we are in one.
He defines a bubble as “a market situation in which news of price increases spurs investor enthusiasm which spreads by psychological contagion from person to person, bringing in a larger and larger class of investors, who, despite doubts about fundamental value, are drawn to the investment partly through envy of others’ successes and partly through a gambler’s excitement.”